WorksheetsUnit 3 Quiz Credit & Debt Review
Total questions: 35
Worksheet time: 47mins
Which of the following is considered a type of unsecured debt?
Mortgage
Car loan
Credit card debt
Home equity loan
Which of the following is NOT a major credit bureau?
Equifax
TransUnion
Experian
American Express
What is the primary purpose of a mortgage?
To finance a car purchase
To consolidate credit card debt
To purchase real estate
To pay for education
Which factor has the largest impact on your credit score?
Length of credit history
Payment history
Types of credit used
New credit inquiries
What is a common characteristic of a fixed-rate mortgage?
Interest rate changes annually
Interest rate & payment remain the same
Payments decrease over time
Payments are interest-only for the first year.
If someone has bad credit or no credit, lenders may require _____________.
A Co-Signer
A Tax attorney
A Home Equity Loan
Additional insurance
What is the effect of declaring bankruptcy on your credit score?
It has no effect.
It improves your credit score because it wipes most debt clean.
It significantly lowers your credit score.
You no longer have a credit score.
Which of the following is a secured debt?
Personal loan
Credit card
Auto Loan
Medical bills
What is the role of credit bureaus?
To lend money to consumers
To collect and maintain credit information
To set interest rates for loans
To provide financial advice
Which of the following is a benefit of having a good credit score?
Higher interest rates on loans
Easier approval for loans and credit cards
More frequent credit inquiries
Increased debt limits
What is the primary advantage of getting a student loan through the Federal Government rather than a private lender?
You do not have to pay back the Federal Loan.
Interest rates can be much lower
It gives you a better chance of a getting a government job.
Interest Rates are much higher.
A lender accepts a lesser amount than was due for an overdue loan. This can negatively impact your credit, but satisfies the debt. This is known as:
Refinancing
Student Loan Forgiveness
Debt Settlement
Credit Default Swap
John wants to roll the balance of his three credit cards into a single loan with a fixed interest rate. What would be his best option?
Opening a 4th credit card
A Secured Credit Card
A Debt Consolidation Loan
A Payday Loan
What is the typical length of a Mortgage in the US?
5-7 Years
10 years
30 years
40 Years
Which of the following is considered a good credit score?
A+
100
790
540
What do Secured loans require of the borrower?
A co-signer
A large down payment
Collateral
To be at least 21 years old
What type of loan is likely to have the lowest interest rate?
Auto Loans
Credit Cards
A Home Mortgage
Payday Loans
Which of the following types of debts cannot typically be discharged in bankruptcy?
Credit Card Debt
Medical Bills
Student Loans
Personal loans
Paying off debt: Starting with the accounts with the smallest balance and working toward the larger balances is known as________________________?
The Debt Snowball
The Debt Avalanche
The Debt Beatdown
The debt Tsunami
What is a common feature of a secured credit card?
No credit limit
Requires a security deposit
Offers rewards points
Has a high annual fee
What is the primary benefit of consolidating debt?
Single monthly payment
Longer repayment period
Higher interest rates
Increased total debt
If someone fail to pay their mortgage for several months, the lender will:
Provide more time to the borrower to figure out their financial situation.
Foreclose on the home.
Double the interest rate on the loan.
Take ownership of the home and rent it to the borrower.
You must begin paying back a student loan ...
when you are ready to do so
only when you find a job
soon after you graduate
none of the above
Which of the following statements is true about this Schumer Box?
The APR for a borrower will always either be 8.99%, 10.99% or 12.99%
There is a permanent APR lower than 8.99%.
A 14.99% APR begins after the introductory period ends.
A borrower can never be charged more than a 14.99% APR.
Which type of loan typically features the highest interest rate?
Payday Loan
Auto Loan
Mortgage
Student Loan
Secured loans are less costly than unsecured loans because
They usually have a lower interest rate.
They require collateral.
They are less risky for the financial institution.
All of these are true.
What is a benefit of having a good credit score?
Loan sharks will be less likely to bother you.
You'll get accepted to better education institutions.
You'll get more job offers.
When you need a loan, you'll have more loan offers to pick from.
An installment loan that provides money for a house
Personal Loan
Auto Loan
Mortgage
Student Loan
An initial payment made when something is bought on credit
Debt
Down Payment
Principal
Interest
A legal process where people who cannot repay debts seek relief from some or all of their debts.
Mortgage
Credit Score
Unbanked
Bankruptcy
The original amount in a bank account OR borrowed for a loan
Interest
Principal
Term
Credit Score
What is a potential consequence of missing multiple credit card payments?
Increased credit limit
Lower interest rates
Negative impact on credit score
Improved credit score
Which of the following debts cannot be discharged during bankruptcy?
Auto Loans
Credit Card Debt
Student Loans
Personal Loans
What is the main purpose of a credit score?
To determine your annual income
To assess your creditworthiness
To calculate your tax liability
To evaluate your job performance
